TIME LIMIT FOR FILING APPEAL AGAINST THE ENHANCED VALUATION OF IMPORTED GOODS

[DR.MARIAPPAN GOVINDARAJAN]

Assessment of duty

Section 17 of the Customs Act, 1962 (‘Act’ for short) provides the procedure for self-assessment by the importers or exporters leviable on imported or exported goods.  The proper officer may verify the entries made and the self-assessment of goods.  The proper officer may examine or test any imported goods or exported goods or such part thereof as may be necessary.  The selection of such goods may be on the basis of risk evaluation through appropriate selection criteria.

Section 17(3) of the Act provides that the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods can be ascertained.  The importer, exporter or such other person shall produce such document or furnish such information.  Section 174(4) of the Act provides that where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.

Section 17(5) of the Act provides that where any re-assessment done is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within 15 days from the date of re-assessment of the bill of entry or the  shipping bill, as the case may be.

If the speaking order is not passed under Section 17(5) the impugned order will be set aside by the Higher judicial forum.

Case law

In M/S TOPSIA ESTATES PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (APPEALS), KOLKATA - 2025 (4) TMI 253 - CESTAT KOLKATA, the appellant is an importer.  The appellant imported polyester knitting fabric.  The alleged period of import is between the period of June 2017 to July 2017.  The appellant used to adopt the value contained in the invoices raised by the overseas exporters.  The Department did not accept this value.  The department enhanced the value of goods.  The appellant, to keep the amicable relations with the Department paid the customs duty on the enhanced value as determined by the Department.  The appellant later urged the Department to finalise the assessment for the period from June 2017 to July 2017 on the basis of the documents submitted by them.  No order has been passed by the Department and finalized the assessment under section 17(5) of the Act.  The appellant waited for some time.  No order has been passed by the proper officer.  Therefore, the appellant filed an appeal before the Commissioner of Customs (Appeals). 

The appellant filed the appeals before the Commissioner of Customs on the basis of 7 bills of Entry on 15.10.2018.  The Commissioner (Appeals), vide his order dated 10.10.2019 dismissed the appeal on the ground of delay in filing the appeal.  The Commissioner (Appeals) observed that the Bills of Entry were assessed in 2017 and the date of filing of the appeal is 15.10.2019, which is much more than the total 90 days’ time available to the appellant to file the appeal, including the condonable period of 30 days.

Being aggrieved by the order of Commissioner (Appeals), the appellant filed the appeal before the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’ for short).  The appellant submitted the following before the CESTAT-

• Initially the appellant had adopted the invoice price as the transaction value and filed their Bills of Entry. 
• The Department rejected the value adopted by the appellant without any reason and also enhanced the valuation of the imported goods.
• The appellants paid the customs duty based on the enhanced value indicated by the Authorities due to urgent need of the materials.
• The appellants have filed all the necessary documents and they are following up with the Customs Officials to finalize the assessment. 
• The proper officer did not make assessment under Section 17(5) of the Act.
• The Commissioner (Appeals) is in error to take the assessment date of Bill of Entry and to come to a conclusion that the appeal has been filed belatedly.

Therefore, the appellant prayed for setting aside the order of Commissioner (Appeals) and to remand the matter back to Commissioner (Appeals).

The Department contended that the Bills of Entry have been assessed finally at the time of import. Therefore, there was no need for the department to issue any speaking order in terms of Section 17 (5) of the Act.  Therefore, the Department reiterated the order passed by the Commissioner (Appeals) is proper and justifiable one.

The CESTAT considered the contentions of both the parties.  The CESTAT analysed the facts of the case on record.  The CESTAT wanted to know as to whether the appellant has filed any letter regarding their request for the finalizing the assessment.  The appellant showed the documents in the appeal paper that the declared that the transaction value of the goods is true.  The appellant accepted the enhanced value of the Department as they wanted the goods and further, they have to pay demurrage charges.  The CESTAT observed that the appellant did not accept the enhanced value ascertained by the Department.  Further the appellant has sent a letter to the Chief Commissioner of Customs stating that in case of these seven bills of entry, no speaking order has been issued under Section 17(5) of the Act.  Thus, it is clear that the appellant has been continuously agitating the enhanced value before the officials.

The High Court was of the view that the Department to issue a speaking order in terms of Section 17(5) of the Customs Act 1962, which was not done in this case. Since no speaking order was issued, the appellant was compelled to treat the Bill of Entry as the impugned document to file their appeal before the Commissioner (Appeals).  The CESTAT did not find any error on the part of the appellant to file appeal before Commissioner (Appeals) on the basis of Bills of Entry.

The CESTAT held that the appellant has filed the appeal correctly and the appeal filed by them is not time barred. Therefore, the CESTAT remanded the matter to the Commissioner (Appeals). The CESTAT directed the Commissioner (Appeals) is required to go through all the documentary evidence placed before him and follow the principles of natural justice and pass a considered decision within 4 months from the date of receipt of this communication.